1st Quarter Results

RNS Number : 9108L
Titanium Asset Management Corp
14 May 2010
 



Titanium Asset Management Corp. 

 

Reports 2010 First Quarter Results

 

Milwaukee, WI, May 14, 2010 - Titanium Asset Management Corp. (AIM - TAM) today reported results for the first quarter ended March 31, 2010.

 

Highlights are as follows:

 

·      Managed and fee paying assets increased by 4.0% from $9,126.3 million to $9,490.2 million during first quarter of 2010.

 

·      Revenues of $5,550,000 for the first quarter of 2010, a 7.5% increase over revenues of $5,163,000 for the same period last year.

 

·      Adjusted EBITDA deficit of $690,000 for the first quarter of 2010 compared to an Adjusted EBITDA deficit of $994,000 for the same period last year.  Excluding severance costs, the Adjusted EBITDA deficit was $270,000 for the first quarter of 2010.

 

·      Net loss of $1,270,000, or $0.06 per diluted common share, for the first quarter of 2010 compared to a net loss of $1,541,000, or $0.08 per diluted common share, for the first quarter of 2009.

 

Commenting on these results, Robert Brooks, CEO of Titanium Asset Management Corporation said:

 

"In the first quarter we continued to see growth in managed and distributed assets. Our managed assets at the end of the first quarter of 2010 were $923 million higher than the first quarter of 2009. Additionally, distributed assets were $166 million higher than they were at the end of the first quarter of 2009. This represents a 12% increase in managed assets and a 20% increase in distributed assets. As a result, revenue in the first quarter grew by $387,000, or approximately 7.5% over the same period in 2009."

 

"We are optimistic that the momentum we are experiencing will continue to drive additional growth in fee paying assets. Performance in our primary products has been consistently above benchmarks and bodes well for future sales. Client withdrawals have eased, particularly at our Charlotte subsidiary, Sovereign Holdings LLC. Our entry into real estate asset management has begun to gain traction in the marketplace. We have won several investment mandates and frequently are seeing new opportunities to manage assets."

 

"We continue to focus on integrating and scaling the overall business to profitably meet the opportunities ahead. While numerous transitional expenses have impacted current profitability, they should recede throughout the year. We are fortunate to have many talented people within all aspects of our business, and our number one challenge remains to empower them to generate excellent performance for our clients, and grow revenue and profits for our shareholders." 

 

 



For further information please contact:

 

Titanium Asset Management Corp.

Robert Brooks, CEO                                                                  312-335-8300

 

Seymour Pierce Ltd

Jonathan Wright                                                                        +44 20 7107 8000

 

Penrose Financial
Gay Collins/Laura Jakob                                                           +44 20 7786 4882 or +44 7798 626282

titanium@penrose.co.uk

 

 



Assets Under Management

 

Our managed and fee paying assets increased by 4.0% three months ended March 31, 2010, totaling $9,490.2 million at March 31, 2010:

 


Managed  Assets

Distributed Assets


(in millions)




Balance at December 31, 2009

      $        8,151.4

     $             974.9

Net inflows (outflows)

183.4

5.2

Market movement

163.6

12.0

Balance at March 31, 2010

      $        8,498.1

     $             992.1

 

Distributed assets are those managed by a hedge fund advisor on which we earn referral fees.  Net contributions are a combination of new and lost accounts plus contributions and withdrawals from existing accounts.  Market movement is a combination of the change in financial market plus the effect (positive or negative) of active management.

 

The increase in managed assets was driven by three factors: the stabilization of assets under management at our Sovereign Holdings subsidiary; new business mandates won; and positive returns in the fixed income and equity markets. While we experienced withdrawals due to the cash needs of our clients, they moderated in the first quarter of 2010 compared to previous periods. Additionally, with the final Term Asset-Backed Securities Loan Facility (TALF) auctions taking place in the first quarter, we were able to add assets at Boyd Watterson.

 

For the three months ended March 31, 2009, 75% of our managed and fee paying assets with defined performance benchmarks outperformed their respective benchmarks.

 

Our assets under management by major investment strategy were as follows:


March 31, 2010

March 31, 2009


(in millions)

% of total

(in millions)

% of total






Fixed income

    $           7,485.4

88.1%

      $           6,795.0

89.7%

Equity

916.5

         10.8%

777.2

         10.3%

Real estate

96.2

1.1%

-

0.0%

Balance at end of period

    $           8,498.1

100.0%

      $           7,572.2

100.0%

 

Our assets under management by broad client type were as follows:

 


March 31, 2010

March 31, 2009


(in millions)

% of total

(in millions)

% of total






Institutional

     $          6,910.4

81.3%

    $           5,858.0

77.4%

Retail

1,587.7

         19.7%

1,714.2

         22.6%

Balance at end of period

     $          8,498.1

100.0%

    $           7,572.2

100.0%

 

Operating Results

 


Three Months Ended

March 31,


2010

2009




Average assets under management (in millions)

8,324.8

7,572.7

Average fee rate (basis points)

24

24




Revenue

 $        5,550,000

 $        5,163,000

Adjusted EBITDA(1)

(690,000)

(994,000)

Operating loss

(1,585,000)

(2,064,000)

Net loss

(1,270,000)

(1,541,000)




Earnings per share:



Basic

$                (0.06)

 $              (0.08)

Diluted

$                (0.06)

 $              (0.08)

 

(1)   See the accompanying table on page 9 for a definition of Adjusted EBITDA, a non-GAAP financial measure.  The table provides a description of this non-GAAP financial measure and a reconciliation to the most directly comparable GAAP measure.

 

Our first quarter revenues increased $387,000, or 7.5%, relative to the first quarter of 2009 due to the increase in average assets under management.  The increase in average assets under management reflects asset gains from our participation in the TALF program and from our new real estate investment advisory business, as well as strong market returns.

 

Our Adjusted EBITDA deficit of $690,000 for the first quarter of 2010 includes $420,000 of severance costs.  Excluding severance costs, our Adjusted EBITDA deficit improved by $724,000 over the prior year amount.  The improvement reflects the 7.5% increase in revenues and a 6.2% decrease in administrative expenses, excluding severance costs.  Our administrative expenses declined $398,000, as a result of the ongoing integration activities and reduced operating staff as well as lower professional fees.  Since March 31, 2009, we have reduced our headcount from 97 to 84.

 

 



Forward-looking Statements

 

This press release contains certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the control of Titanium.

 

Any forward-looking statements made in this press release speak as of the date made and are not guarantees of future performance.  Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the Company undertakes no obligation to update any such statements.  Results may differ significantly due to market fluctuations that alter our assets under management; termination of investment advisory agreements; impairment of goodwill and other intangible assets; our inability to compete; market pressure on investment advisory fees; ineffective management of risk; changes in interest rates, equity prices, liquidity of global markets and international and regional political conditions; or actions taken by Clal Finance Ltd., as our significant stockholder.  Additional factors that could influence Titanium's financial results are included in its Securities and Exchange Commission filings, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

The Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2010, is expected to be filed with the Securities and Exchange Commission on or before May 16, 2010. The report will be available on the SEC's website at www.sec.gov and on the Company's website at www.ti-am.com.



 

Titanium Asset Management Corp.

Condensed Consolidated Balance Sheets

 


March 31,

2010

December 31, 2009


(unaudited)


Assets



Current assets



Cash and cash equivalents

 $           947,000

 $        4,773,000

Investments

12,009,000

12,549,000

Accounts receivable

3,789,000

5,030,000

Other current assets

1,121,000

1,162,000

Total current assets

17,866,000

23,514,000




Investments in affiliates

6,318,000

2,179,000

Property and equipment, net

402,000

427,000

Goodwill

28,147,000

28,147,000

Intangible assets, net

24,091,000

24,920,000

Total assets

 $      76,824,000

 $      79,187,000




Liabilities and Stockholders' Equity



Current liabilities



Accounts payable

 $           198,000

 $           237,000

Acquisition payments due

1,744,000

1,746,000

Other current liabilities

2,541,000

3,504,000

Total current liabilities

4,483,000

5,487,000




Acquisition payments due

960,000

960,000

Total liabilities

5,443,000

6,447,000

Commitments and contingencies



Stockholders' equity



Common stock, $0.0001 par value; 54,000,000 shares authorized; 20,564,816 shares issued and outstanding at March 31, 2010 and December 31, 2009

2,000

2,000

Restricted common stock, $0.0001 par value; 720,000 shares authorized; 612,716 issued and outstanding at March 31, 2010 and December 31, 2009

-

-

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued

-

-

Additional paid-in capital

100,373,000

100,332,000

Accumulated deficit

(29,036,000)

(27,766,000)

Other comprehensive income

42,000

172,000

Total stockholders' equity

71,381,000

72,740,000

Total liabilities and stockholders' equity

 $      76,824,000

$      79,187,000

 



 

Titanium Asset Management Corp.

Condensed Consolidated Statement of Operations

 (unaudited)

 


Three Months Ended

March 31,


2010

2009




Operating revenues

  $        5,550,000

$        5,163,000




Operating expenses:



Administrative

6,306,000

6,284,000

Amortization of intangible assets

829,000

943,000

Total operating expenses

7,135,000

7,227,000




Operating loss

     (1,585,000)

     (2,064,000)




Other income



Interest income

88,000

120,000

Gain (loss) on investments

104,000

(381,000)

Income from equity investees

139,000

-

Interest expense

(16,000)

(14,000)




Loss before taxes

(1,270,000)

(2,339,000)




Income tax benefit

-

(798,000)




Net loss

  $      (1,270,000)

$     (1,541,000)




Earnings (loss) per share



Basic

  $              (0.06)

$             (0.08)

Diluted

  $              (0.06)

$             (0.08)




Weighted average number of common shares outstanding:



Basic

20,701,493

20,546,491

Diluted

20,701,493

20,546,491







 

 

 



 

Titanium Asset Management Corp.

Condensed Consolidated Statement of Cash Flows

 (unaudited)

 


Three Months Ended

March 31,


2010

2009




Cash flows from operating activities



Net loss

 $     (1,270,000)

 $     (1,541,000)

Adjustments to reconcile net loss to net cash used in operating activities:



Depreciation and amortization

854,000

972,000

Share compensation expense

41,000

98,000

Loss (gain) on investments

(104,000)

381,000

Income from equity investees

(139,000)

-

Accretion of acquisition payments

16,000

10,000

Deferred income taxes

-

(798,000)

Changes in assets and liabilities:



Decrease (increase) in accounts receivable

1,241,000

403,000

Decrease (increase) in other current assets

41,000

(24,000)

Increase (decrease) in accounts payable

(39,000)

(221,000)

Increase (decrease) in other current liabilities

(981,000)

(63,000)

Net cash used in operating activities

(340,000)

(783,000)




Cash flows from investing activities



Purchases of property and equipment

-

(93,000)

Purchases of investments

(6,675,000)

(1,514,000)

Sales and redemptions of investments

7,189,000

-

Investments in equity investees

4,000,000

-

Cash paid for acquisition of subsidiaries, net of cash acquired

-

(6,000)

Net cash used in investing activities

(3,486,000)

(1,613,000)




Cash flows from financing activities



Payment of deferred acquisition obligations

-

(8,145,000)

Net cash used in financing activities

-

(8,145,000)




Net decrease in cash and cash equivalents

(3,826,000)

(10,541,000)




Cash and cash equivalents:



Beginning

4,773,000

18,753,000

Ending

 $           947,000

 $        8,212,000




 



 

 

Titanium Asset Management Corp.

Reconciliation of Adjusted EBITDA

 (unaudited)

 


Three Months Ended

March 31,


2010

2009




Operating loss

$      (1,585,000)

$      (2,064,000)




Amortization of intangible assets

829,000

943,000

Depreciation expense

25,000

29,000

Share compensation expense

41,000

98,000




Adjusted EBITDA(1)

$         (690,000)

$         (994,000)

 

Notes:

 

(1)   Adjusted EBITDA is defined as operating loss before non-cash charges for amortization and impairment of intangible assets and goodwill, depreciation, and share compensation expense.  We believe Adjusted EBITDA is useful as an indicator of our ongoing performance and our ability to service debt, make new investments, and meet working capital obligations.  Adjusted EBITDA, as we calculate it may not be consistent with computations made by other companies.  We believe that many investors use this information when analyzing the operating performance, liquidity, and financial position of companies in the investment management industry.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
QRFMMGMKNFGGGZM
UK 100

Latest directors dealings